Analyst: Netflix’s Pain Could be Redbox’s Gain

Redbox Entertainment could be seeing a gain from the fiscal pain Netflix has experienced this week since reporting a first-quarter net loss of 200,000 subscribers. The SVOD pioneer’s stock price has cratered almost 40% since April 19 when it said it expects to lose 2 million subs in the current quarter ending June 30.

At the same time, Redbox has seen its shares skyrocket in value more than 25%, despite posting a loss of more than $140 million in 2021.

Michael Pachter

That could be because Netflix disclosed it was considering launching a lower-priced ad-supported subscription plan — a significant move considering co-founder Reed Hastings’ long aversion to advertising.

Redbox, of course, has made major strides launching digital distribution of content across both transactional and ad-supported streaming platforms. The company generated more than $35 million in digital revenue last year.

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With studios launching higher profile titles in theaters, trickle down to Redbox kiosks, transactional VOD and possibly AVOD portend near-term positives, according to Michael Pachter, analyst with Wedbush Securities in Los Angeles.

“[Their] movie lineup is really good, and they have advertising, so maybe Netflix’s foray into [ad-supported streaming] is an endorsement,” Pachter wrote in an email.

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